Newspaper article THE JOURNAL RECORD

Fleming to Double Capital Investment in `98 Oklahoma City Firm Reports Lower Net Income

Newspaper article THE JOURNAL RECORD

Fleming to Double Capital Investment in `98 Oklahoma City Firm Reports Lower Net Income

Article excerpt

Fleming Cos. will nearly double its capital investment this year to $230 million, building and renovating more than 60 stores, in a bid to keep pace with its competitors and counter declining retail sales.

The giant Oklahoma City wholesale food marketing and distribution company reported Thursday its `97 net earnings dropped 4.8 percent to $25.39 million, or 67 cents per share , from $26.68 million, or 71 cents per share, in 1996. But when a recapitalization charge of $13.3 million and litigation expense of $20.9 million are factored in, Fleming's adjusted earnings totaled $49.9 million, or $1.32 per share, up 30.5 percent from $38.3 million, or $1.01 per share, the prior year.

Net sales declined 6.8 percent in 1997 to $15.37 billion from $16.48 billion. Of that, Fleming's retail food segment sales fell 6.7 percent to $3.5 billion from $3.7 billion, with overall same- store sales down 3.4 percent. Fleming spokesperson Nancy Del Regno attributed the same-store slip to "competitors' higher rate of new store openings." To counter that, Fleming Chief Executive Robert E. Stauth said his company will increase its capital investments in new stores to $230 million from $129 million in 1997. The plan calls for building 21 new company-owned stores, a 50 percent increase over 1997, and doubling its renovations to 40. Fleming's retail customers also plan to become more competitive in store development, building more than 65 new sites and remodeling about 290 stores. Del Regno said new store expansion areas include Minneapolis, Phoenix, Milwaukee and "other markets." Fleming now serves more than 3,000 supermarkets in 42 states and operates 277 stores in 14 regional food retail chains or groups. For the fourth quarter, Fleming's net earnings rose 7.8 percent to $11.1 million, or 29 cents per share, from $10. …

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